Futures regulator homes in on carbon markets

Regulators are looking to introduce standards and curb manipulation in a market that has operated without federal oversight. — Reuters

LONDON: The Commodity Futures Trading Commission (CFTC) is investigating greenwashing as part of its crackdown on fraud and misconduct in the voluntary carbon markets, a commissioner at the US regulator says.

The probe into false claims about the environmental benefits of carbon credits as well as the green credentials of financial products, comes as CFTC homes in on its first set of federal guidelines for voluntary carbon credit derivatives.

Regulators are looking to introduce standards and curb manipulation in a market that has operated without federal oversight.

The CFTC is investigating the activities under its Environmental Fraud Task Force, which it introduced in June 2023 to tackle fraud and manipulation in carbon credit markets and other forms of greenwashing, such as misrepresentations about environmental, social and corporate governance investment strategies.

“The idea is to weed out the bad actors that could impact the derivatives market, we would do that with any commodity,” said CFTC commissioner Christy Goldsmith Romero on the sidelines of a conference in London.

Goldsmith Romero said the watchdog had not yet brought a case but said that several activities were under “active investigation”. — Reuters